Letter To MPs.

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By Paul Homewood

Here is the final version of a letter to your MP regarding Contracts for Difference:

The Government’s statements on the falling cost of offshore wind power are false and have disgracefully misled the British public.

We have been repeatedly promised by successive governments that the cost of offshore wind power has fallen substantially, and that this would lead to lower electricity bills. For instance, Kwasi Kwarteng announced last year:

“Our renewable energy auction scheme has been an outstanding success, with the latest round securing enough clean energy to power twelve million British homes and the price of clean energy plummeting even further. 
Getting contracts signed means projects can push on and deliver jobs and opportunities across the country. This will help to secure our homegrown supply of cheaper renewables and bring down the price of energy for millions of British families as we shift away from expensive fossil fuels”

However the public are yet to see any of these supposed savings. In the last decade, the cost of subsidising renewable energy has already amounted to £86 billion. And this bill continues to rise.

So far this year, up to the end of March, the average price paid to offshore wind farms via Contracts for Difference has been £166/MWh – this compares to a market price of £120/MWh (according to data provided by the Low Carbon Contracts Company). This means a total subsidy during the period of £231 million, paid for by energy users.

Meanwhile, Moray East and Hornsea 2, the most recent windfarms to come on stream, which agreed prices of £74.49 and £83.94/MWh respectively,  have refused to trigger their contracts, and are therefore profiting from much higher market prices. By the terms of their contracts, it seems there is nothing the government can do to force them to.

Worse still, there is another 11 GW of renewable capacity which has been awarded CfDs and which are due on stream in the next few years. These also have contract prices well below market levels, and it seems inevitable that these contracts will also not be triggered, unless market prices fall drastically.

Please advise what action the government is taking to ensure that these “lower costs” are passed on to energy users.

Obviously it is aimed at Tory MPs, but can easily be amended for other parties, for example:

“Please advise what action the Labour Party would take to ensure that these “lower costs” are passed on to energy users.”

I also plan to send this letter to various Parliamentary Committees.